Businesses using Amazon to sell their products have filed a £1 billion damages claim against the online retailer, claiming that it has been misusing their data.

They allege that, since October 2015, Amazon has used UK retailers’ non-public data to develop its own products that result in sales revenue and profits being diverted away from the retailers.

The claim, filed on Friday through the Competition Appeal Tribunal (CAT) in London, has been brought by the British Independent Retailers Association (BIRA) on behalf of around 35,000 sellers who have not been named.

It alleges that “commercially valuable and confidential information helps Amazon decide whether to enter a new product segment based on its earnings and sales potential, which elements of the product to copy, how to price an item and which consumers to target.

“That information in combination with the Buy Box meant Amazon knew it could successfully enter and take away profits from UK retailers.”

The Amazon Buy Box is the much sought-after box at the side of each listing displaying the “Buy Now” and “Add to Cart” buttons. Only one seller can hold the Buy Box at a time which is based on data and algorithms.

BIRA’s chief executive, Andrew Goodacre, said: “One might ask why would an independent retailer use Amazon if it is so damaging to their business? In reality, we have seen a significant shift in consumer buying behaviour and, if small business want to sell online, Amazon is the dominant marketplace in the UK.

“As a result, for small retailers with limited resources, Amazon is the marketplace to start online trading. Whilst the retailers knew about the large commissions charged by Amazon, they did not know about the added risk of their trading data being used by Amazon to take sales away from them.”

In a statement on Friday, Amazon said: “We have not seen this complaint, but based on the reporting so far we are confident that it is baseless and that this will be exposed in the legal process.

“Over 100,000 small and medium-sized businesses in the UK sell on Amazon’s store, more than half of all physical product sales on our UK store are from independent selling partners, and the fact is that we only succeed when the businesses we work with succeed.”